I have previously written about the toxic influence that the US financial sector exerts on strategies to reduce unwanted calls. Put simply, they do not care how many nuisance calls are received by ordinary people so long as financial businesses can continue to make as many calls as they like, and can continue to spoof the CLI of calls from foreign call centers to make them appear as if they originated locally. So it comes as no surprise that an association which represents US insurance companies is hoping new legal maneuvers will obstruct one of the few changes by the Federal Communications Commission (FCC) that would actually deliver a meaningful reduction in robocalls. Per a petition lodged with the 11th Circuit Court of Appeals by Insurance Marketing Coalition Limited:
…the Insurance Marketing Coalition Limited (“IMC”) hereby petitions this Court for review of an order of the Federal Communications Commission titled Second Report and Order, In the Matter of Targeting and Eliminating Unlawful Text Messages, Rules and Regulations Implementing the Telephone Consumer Protection Act of 1991, Advanced Methods to Target and Eliminate Unlawful Robocalls… IMC seeks review on the grounds that the Order is arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law; is in excess of statutory jurisdiction, authority, or limitations; and was adopted without observance of procedure required by law… IMC requests that this Court hold unlawful, vacate, enjoin, and set aside the Order.
The target of this legal action is a refinement of the rules relating to phone users giving their consent for telemarketing robocalls. One reason the authorities struggle to reduce unwanted calls is the sheer number of robocalls that have supposedly been made with the consent of the Americans who received them. With so many telemarketing robocalls being placed every day, and with no centralized way of checking the recipient had consented to receive calls from the organizations that placed them, it becomes impractical to enforce the rules except for the most egregious robocall campaigns. A phone user may complain about receiving a call but it may then transpire that the call was legal because that user had consented to it, per a loose notion of consent that reflects the low integrity of US telemarketers. The FCC would like to prohibit one of the most obvious abuses when telemarketers claim to have permission to call somebody.
Consider a scenario where you tick a box on a web form which says you consent to unnamed companies contacting you about products and services that are related to an enquiry you are making. Boom! Per the rationalizations of many US marketing professionals, you have just signed up to receiving an endless stream of robocalls and robotexts from businesses you have never heard of, trying to sell you products and services that do not interest you at all. The FCC’s refinement of the rules is meant to curtail the collection of this open-ended form of consent by lead generators, with phone users only being able to consent to receiving automated communications from specific named sources in future. This is styled as the closing of the ‘lead generator loophole’ by the FCC.
If you want to understand why I have such a low opinion of US regulators, stop and ask yourself why such a rule change was not adopted decades ago. The abuse of open-ended consent is so obvious and so rife that it beggars belief that the FCC only found time to draft the necessary rule change in December 2023, and still does not intend to impose it before January 2025, supposedly because scummy marketing companies need over a year to ‘prepare’ for the change. This particular regulator acts tough when talking about telcos, but has been deferential towards other business interests it is not directly responsible for regulating. This encourages those businesses to throw their weight around, as further confirmed by this legal action from the insurance industry.
The weight of cultural and legal precedent is on the side of businesses who want to pretend that a new rule like this will impede their right to free speech. Hence we have an association that represents insurance providers — the kinds of companies who most aggressively call Americans and dupe them with misleading offers relating to health insurance — attempting to block this necessary and long overdue rule change because it will prevent them making so many robocalls. They do not care about the wider impact. They only care about making money, and they typically expect politicians and regulators to bend over backwards to accommodate them. If they cannot get their way through direct lobbying they resort to hiring expensive lawyers to find some constitutional rights or some obscure technocratic law that is supposedly being violated by the authorities. IMC has hired top legal firm Covington & Burling to fight the FCC. Covington was founded over a century ago, has offices in cities around the world, and often recruits senior lawyers who previously worked for the US government.
The FCC is also a bunch of lawyers, so they will fight this petition. Last week they submitted their formal opposition to the IMC motion to stay the new rules. It is a sign of the incredible weakness of the FCC and the laws that it oversees that one of their arguments is that the ‘lead generator loophole’ will only be closed for robocalls, and will not be closed for live telemarketing calls.
Moreover, IMC fails to substantiate the magnitude of the claimed devaluation of its members’ leads, because it fails to acknowledge… that such leads could still be used for live calls (not robocalls), and its supporting declarant does not clearly explain the degree to which the company’s monetization of shared leads depends on robocalling or robotexting.
I am no lawyer, but I expect the FCC to prevail in this fight. A defeat in court would just bounce the issue back to politicians, begging the question as to why existing laws favor the interests of businesses who aggressively pursue sales to the detriment of ordinary phone users. There has been broad support for robocall reduction from across the political spectrum because voters are so utterly fed up with the barrage of unwanted calls they continue to receive. The number of robocalls recorded by YouMail’s Robocall Index has barely changed, despite a stream of deceitful guff from clowns who pretended that STIR/SHAKEN and the Robocall Mitigation Database would lead to a significant reduction in nuisance calls. The FCC is too weak to completely close the ‘lead generator loophole’ but it is seeking to improve upon a woeful situation that has been allowed to persist for too long. Too many voters are too angry about too many unwanted calls for the insurance industry to resist the tightening of consent rules for long, no matter how much money they will lose as a consequence.
Stepping back and looking at the global picture for illegal and abusive phone communications, this sorry episode provides further confirmation that the USA is constitutionally unfit to lead positive change worldwide. US proposals backed by big American businesses always assume a starting point which is at the very bottom of the cesspit. The majority of other countries already have higher standards, whether they stems from formal laws and regulations, from the relationship between government and the private sector, or because their inhabitants are less tolerant of unwanted calls and more willing to punish those businesses that attract attention to themselves by making them.
Americans who seek to reduce nuisance calls often talk about taking ‘a step in the right direction’, but a step in the right direction from the perspective of a US consumer would often be a step in the wrong direction if applied elsewhere. The world needs to monitor how the US is tackling unwanted and illegal calls not because other nations should be following the same example, but to learn from the mistakes that the USA has made and continues to make.
